Buying property in Spain
In 2021, nearly 215,000 Brits were living in Spain, drawn by the attractive climate, culture and cuisine.
If you’re considering joining them, you need this guide to buying property in Spain. We’ll cover all you need to know, including:
How do you buy a property in Spain post-Brexit
Is buying a property in Spain a good idea?
How can I find a property to buy in Spain?
What’s the cost of buying a property in Spain - and how to save?
How much tax do you pay when buying a house in Spain?
Can UK citizens buy property in Spain after Brexit?
UK citizens can still buy property in Spain after Brexit. There are no rules which prevent Brits from buying a property for themselves, to rent out or as an investment in Spain.
However, a couple of things have changed as a result of Brexit. UK citizens are no longer able to stay indefinitely in the EU without applying for a visa. This means that if you’re buying a property to live in and intend to stay for more than 90 days in a 180 day period you’ll need to get permission. And if you’re buying a property to rent out you’ll need to pay a higher level of tax on your rental income in Spain post-Brexit. Regional rules and restrictions may also apply if you’re considering a buy-to-let in Spain. Make sure you get professional advice to stay on the right side of the law.
What are the requirements to buy a house in Spain?
The good news is that whether you’re considering city living in Madrid, Barcelona or Valencia, or a coastal retreat in Andalucia, buying a property in Spain is a relatively straightforward process.
Property in Spain can be bought by anyone - broadly without restrictions. You’ll need to have financing in place, and you’ll be asked for standard documents like proof of identity and address. In fact, the only extra thing you’re likely to need to buy a property in Spain as opposed to the UK - is a NIE number - Número de Identidad de Extranjero. This is a Spanish foreigners identification number you can obtain by visiting your local police station if you’re already in Spain, or the Spanish embassy if you're still in the UK.
How to buy a home in Spain step by step
Buying a home in Spain is not wildly different to the process in the UK. However, navigating a different country’s processes is never straightforward, so having local support and advice is recommended. Here are the basic steps you’ll need to take:
Set a budget for buying your new Spanish home, and get a mortgage offer in principal if required
Decide on the Spanish city or region where you want to buy a property
Find a local Spanish estate agent and start to view properties
Select a property lawyer to work with - make sure they’re registered at the local Bar Association - the Colegio de Abogados
Choose your perfect Spanish property
Make an offer and enter into negotiations with the seller
Once you’ve agreed a price, sign the preliminary offer - contrato privado de compraventa
Pay a 10% deposit
Your lawyer will complete due diligence checks - you’re also advised to get a survey on the property ro check the condition
Sign the sales contract - escritura de compraventa - in front of a notary
Pay the remaining purchase costs, taxes and legal fees
Spanish property prices
Overall, Spanish property prices are - on average - lower than the costs of buying a home in the UK.
In fact, Numbeo - which aggregates live data submitted by users around the world - estimates that it costs on average 65% more per square metre to buy a UK city centre apartment compared to a similar place in Spain - and 85% more to get a place outside of the city centre.
Of course, Spanish property prices vary widely between regions and property types - we’ll take a look at some of the best places to buy property in Spain next.
Best places to buy property in Spain
The best place to buy property in Spain will depend on how you’ll use it, how much you want to spend, and the lifestyle you’d like to achieve.
If you’re looking for a coastal property in an area with a large and active expat community you might want to consider the regions of Valencia and Andalucia - home to the largest British communities in Spain. For a lower cost and a relaxed lifestyle, take a look at Murcia. And of course if you’re headed to Spain to get a taste of city life, you can’t go wrong with Madrid, Barcelona, Valencia or Seville.
As you’d expect, buying a property in a city centre location will be pricey - but there are also some great picks for a lower cost property in Spain. More on that coming right up.
Cheapest places to buy property in Spain
If you’re looking for a lower cost place in Spain you’ll probably want to avoid the Spanish islands - but despite this it is still possible to find cheap coastal property in Spain if that's your thing. Each region has its own up and coming locations where the property costs may be below average, so getting a local agent to help you search will pay off.
As a few examples to start your search:
Affordable properties in the Costa Blanca - check out Torrevieja or Santa Pola for great locations which balance the budget
Some of the cheaper places to buy in Murcia include Sucina and Balsicas - still a short drive from the beach and Mar Menor
Fancy the Costa del Sol? Affordable locations include Manilva - but there are also bargains to be found even in the well known resort locations if you search
Is buying a house as an investment in Spain a good idea?
Whether investing in Spanish property is right for you depends on what you’re hoping to achieve and how long you’re prepared to leave your money locked away.
It’s important to remember that you’ll likely have to pay 24% tax on rental income if you let out a Spanish property, and there is also a capital gains tax of 24% for non EU citizens which is payable upon selling the property. The Spanish property market has had its ups and downs, which is worth considering if you need liquidity or you’re looking for a low risk investment option.
In all cases, you’ll want to get high quality, professional investment advice to make sure you’re making the right decisions for you.
What’s the property market like in Spain?
We mentioned earlier that the Spanish property market has had its ups and downs. In fact, Spanish property prices fell significantly during the global financial crisis of 2007-2008, with annual decreases in overall house prices a feature until around 2015. However, Spanish house prices did stabilise significantly in the years that followed.
The global pandemic caused a fairly short, sharp dip in overall average prices per square metre in the mid-part of 2020. However by the middle of 2021 prices were back to their pre-pandemic levels, and have seen significant growth since.
How much does it cost to buy property in Spain?
Here’s a look at average prices per square metre for some major Spanish cities to help build a picture of the costs of buying property in Spain.
Price per square metre - city centre (GBP)
Price per square metre - outside of city centre (GBP)
- Data taken from Numbeo.com; correct at time of writing, 15 March 2021
On top of the property cost don’t forget you’ll also need to pay additional fees and taxes at the point of purchase. These can include:
Property transfer taxes of 6% - 10% of the property value
Notary fee of 0.03% - 0.45% of the property value
Registration fee of 0.02% - 18% of the property value
Estate agent fee of 2.5% - 3% of the property value
Financing a property purchase in Spain
There are a few common ways to finance a property purchase in Spain:
Buy in cash using savings
Get a Spanish mortgage
Get a mortgage or loan in the UK
Refinance your UK property and use the cash to buy in Spain
Each option has its own advantages and disadvantages. Before you decide how to pay for your new home in Spain you’ll want to research the choices which are available to you, and consider the pros and cons.
Getting professional advice is a good idea. Although you’ll often pay for the service, using a specialist advisor or broker can also mean you cut costs in the end by getting a deal which really suits your needs.
Getting a Spanish mortgage
It is possible to get a Spanish mortgage to pay for your property. However, as banks set their own terms and conditions you may need to shop around to find the right mortgage for your needs.
The exact products available for you will depend on the property you’re buying, the value of the loan you need, and the loan to value ratio. It’s common for foreigners and non-residents to require a higher deposit amount compared to Spanish citizens and residents - about 30% is normal.
Other fees may apply - including application charges, early repayment costs and late payment penalties. Make sure you read all the paperwork carefully before you make a final decision on which mortgage to choose.
Paying property tax in Spain
When you buy a property in Spain you’ll need to pay some costs at the point of purchase, including a property transfer tax which is likely to be around 6% to 10% of the value of the property. There are then ongoing taxes to consider too, which can vary based on your situation and where in Spain your property is located. These costs include:
Property ownership tax - impuesto sobre bienes inmuebles or IBI - is set on a regional level and paid annually or by instalments, usually around 0.4% - 1.1% of the property value
Wealth tax - impuesto sobre el patrimonio - paid on the value of your estate including your property. Tax free allowances are in place which vary depending on whether you’re a resident or not
If you rent your property out you’ll usually have to pay 24% tax on the rental income as a non-EU citizen
Most of your Spanish property taxes can be paid online once you have registered with the local tax authorities wherever you buy your property.
How easy is buying property in Spain for foreigners?
Buying a property in Spain as a foreigner is fairly straightforward. However, it’s important to understand common pitfalls of buying Spanish property before you get started. Some common problems with buying a property in Spain include:
Underestimating the additional costs and taxes payable at the time of purchase and for maintenance of the property
Failing to complete due diligence checks - making sure the house has been built legally, can legally be sold, and does not have any debts attached to it, for example
Buying without a building survey - some older properties in particular may have construction issues which are expensive to fix
Trying to do everything yourself - Local support and advice can help you navigate the process and make sure everything goes through smoothly
How to find a Spanish property
If you’re ready to make your Spanish property dream come true you might be wondering how to get started and find the perfect home in Spain for you. There are a few key options to consider:
Use Spanish real estate websites which aggregate lots of listings from different agents
Choose a local estate agent - an inmobiliaria - in the area you want to buy in
Choose an estate agency which is a specialist in helping expats buy a place in Spain
Use your own network or word of mouth to find a perfect place
Spanish property websites
Here are a few popular Spanish property websites to get your search started:
Spain is a very popular destination for people who want to buy an international property for themselves or as an investment. With a large expat community, enviable lifestyle and attractive climate, Spain could be the perfect place to consider if you want to live, work, retire or invest abroad.
If you’re ready to take the leap and buy a property in Spain the good news is that the process is relatively straightforward and there are not usually any limits on the type of place you can buy as a foreigner. Make sure you get all the local and professional advice you need to navigate the property purchase process, and you could be living the Spanish dream in next to no time.